Synopsis: By lowering the transaction costs of group action, the Internet has made possible a new model of production – commons based peer production. Not market driven, not government directed and not organisationally controlled, peer production within online communities of interest represents a qualitatively new form of production. Benkler was the first to identify it.

My Take:

Yochai Benkler, a Law Professor at Yale University, is the grand-daddy of the theoretical analysis of online peer production. While Richard Stallman and Eric Raymond preceded him in making the philosophical/political case that underpinned the F/LOSS movement, Benkler was the first to engage in serious theoretical analysis of internet enabled peer production using established economic approaches.  While others had previously written about the unique economic characteristics of information economics (ie high fixed costs, low marginal costs, non-exhaustion and difficulty of exclusion), Benkler was the first serious academic to identify and describe the way that falling transaction costs of collaborative group action facilitated this kind of peer production. In fact, Benkler’s 2002 article, “Coase’s Penguin, or Linux and the Nature of the Firm” is probably the seminal article on peer-to-peer production in the networked information economy. Benkler’s early work underpinned a slew of more recent and highly influential publications (Clay Shirky’s “Here Comes Everyone”, James Surowiecki’s “Wisdom of Crowds” and Don Tapscott’s “Wikinomics”).

Benkler’s great insight was that the series of internet enabled phenomena like the Open Source Software movement, Wikipedia and a multitude of communities of expertise centred around blogs represented a genuinely new model of information/cultural production; a model he described as Peer Production. Benkler recognised that internet enabled social tools such as email, blogs and social networking sites have dramatically reduced the transaction costs of finding and maintaining contact with likeminded individuals. As a result, communities of interest allowing large scale collaboration outside traditional organisational or market relationships have only proliferated in recent times.

Within the blogosphere (a key example of this phenomenon at the time of the writing of “The Wealth of Networks”, communities of interest form around and between topic oriented blogs. Individuals with an interest in the topic of the blog converge around the site and interact with the blogger and each other through the comments section and other social media tools (eg email, social networking sites). Other interested bloggers also interact with the blog through almost ubiquitous comment ‘trackback’ functions that aggregate incoming links and comments for the blog. As a result, each blog acts as both a platform for, and a participant in, collaboration within communities of interest.

According to Benkler, each blog constitutes a node in the networked public sphere around which a community of interest may form. The contributions of participants in each community of interest are aggregated at the intra-blog level through the comments section and via direct communication with the blogger. The blogger then performs an initial filtering function, exercising discretion as to which contributions are then integrated into the body text of the blog in subsequent posts. The body text of each blog is then subject to filtering at the inter-blog level through a process of peer review within the broader community of bloggers writing on the relevant topic. Benkler theorises that this process of decentralised peer review will result in attention in the blogosphere being distributed according to the quality of each contribution, regardless of its source.

Benkler theorises that this will occur because high quality, salient contributions within the networked public sphere are likely to attract increased attention in the form of favourable coverage at other blogs and resulting links back to the original post. Low attention nodes have an incentive to try to draw attention to their higher quality posts by alerting more prominent bloggers in their immediate communities of interest to their posts via email, comments or trackbacks. These more prominent bloggers will filter these submissions and link back to high quality posts. As a result, high quality content that emerges from a low visibility node will diffuse through the community by moving up the attention distribution to be incorporated in high attention blogs. This attention distribution process is further accelerated by Google’s link-reliant, PageRank search algorithm that provides increased prominence to posts on blogs with more links.

In contrast, according to Benkler, a low quality contribution from a low attention node is likely to be ignored, or at most criticised by other bloggers within the community and is unlikely to attract further attention from within the community of interest. A high attention node that produces a low quality post is likely to attract criticism the community in the comments of the post in the short term and if the node continues to produce low quality information in the longer term, is likely to lose attention within the community. While inaccuracies are not prevented from being published, they are unlikely to be systemic and accuracy is likely to increase in the long term.

Benkler theorises that while not perfect, over time this process will generally result in higher quality, more salient information attracting more attention and low quality, low salience information being rejected or ignored. The implication of this community judged, meritocratic attention distribution process is that the reliability of information aggregated at any node within the networked public sphere will increase with the prominence of that node within a community of interest. In this way, Benkler essentially uses attention within the blogosphere as a proxy for quality and uses the skewed distribution of attention within communities of interest as a heuristic for judging the quality of blog content.

On top of this attention distribution filtering mechanism, the reliability of the content incorporated into the ‘A-list’ blogs within a community is further reinforced by the complimentary effect of “Linus’ Law” of Peer Production on the attention distribution process. Linus’ law provides that “Given enough eyeballs, all bugs are shallow”, that is that the participatory nature of the blogosphere will ensure that if enough people are viewing a piece of information someone will highlight any inaccuracies in this information, allowing it to be corrected. As such, the more people that are reading a blog, the more likely it is that someone will highlight an error in a post. In this way, filtering within the blogosphere occurs post-publication rather than prepublication. Benkler shows that while there are generally no formal editors vetting the content of an individual blogger pre-publication, the skewed distribution of attention within the blogosphere creates points at which an editorial filtering process can occur post-publication.

Sadly, Benkler isn’t the most accessible writer. A lot of the time he can get himself needlessly lost in esoterica and jargon. Further, when he strays from economics and moves into political economy and media studies  in Parts 2 and 3 of “The Wealth of Networks” both his persuasiveness and credibility suffer (in particular, Benkler seems to unquestioningly swallow a lot of the assertions of the Frankfurt School about the nature of traditional mass media and it’s normative inferiority to what he describes as the emergent online ‘networked public sphere’).

Highlight:

“Sometimes, under conditions I specify in some detail, these nonmarket collaborations can be better at motivating effort and can allow creative people to work on information projects more efficiently than would traditional market mechanisms and corporations. The result is a flourishing nonmarket sector of information, knowledge, and cultural production, based in the networked environment, and applied to anything that the many individuals connected to it can imagine.”

Synopsis: The greatest economics writer in the blogosphere switches medium to offer an extended treatise on the use of economic principles to improve the non-economic aspects of your life. Utility is maximised.

My Take: Tyler Cowen’s blog, Marginal Revolution, is hands down one of the best blogs on the ‘net.  Not because he is the best economist online today (Greg Mankiw, Dani Rodrick, Paul Krugman, Steven Levitt and Gary Becker/Richard Posner would all have claims here), but because his personality is so perfectly suited to the medium.  Instead of producing worthy and dry pieces of brilliant economic analysis, Cowen’s approach to Marginal Revolution is that of a cultural Bower Bird; collecting and displaying fascinating titbits from both his professional and cultural interests.  The New York Times describes Cowen as:

a world-class polymath who whips through graphic novels and 816-page bricks like Africa: A Biography of the Continent, listens to everything from Bach to Brazilian techno, searches out exotic cuisines all over the world, and still finds time to travel to remotest Mexico to update his collection of amate painting. For him, deep immersion in culture defines the good life, and his readers get the vicarious benefits.

Cowen successfully translates this eclectic mix of rigorous classical economics and cultural diversity into the literary world via “Discover Your Inner Economist”. In DYIE, Cowen takes a more in-depth look at his cultural preoccupations through the prism of economic analysis and with an eye to maximising utility. As he puts it:

“Economics developed out of a recognition of the fact that many things worth having don’t just fall into our laps in the course of our everyday lives… The real purpose of economics is to get more of the good stuff in life.”

Cowen’s overarching insight into our cultural lives is illuminating. For him:

“The critical economic problem is scarcity. Money is scarce, but in most things the scarcity of time, attention, and caring is more important.”

Once you accept that there are limits to most people’s (ie non-professionals) interest in the arts and capacity to pursue this interest, the question then becomes how an individual can most efficiently maximise their enjoyment of culture within these constraints.

Again, Cowen’s insights into how one could go about this are both useful. Take his approach to art appreciation. Cowen begins by acknowledging the relevant constraint:

“Our time and attention is scarce. Art is not that important to us, no matter what we might like to believe… Our love of art is often quite temporary, dependent upon our moods, and our love of art is subservient to our demand for a positive self image. How we look at art should account for those imperfections and work around them. “

Keep in mind that books, like art museums, are not always geared to the desires of the reader. Maybe we think we are supposed to like tough books, but are we? Who says? Many writers (and art museums) produce for quite a small subsample of the… public.

So how should we go about maximising our attention and making most efficient use of our time:

“In each room, ask yourself which picture you would take home – if you could take just one – and why? This forces you to keep thinking critically about the displays. If the alarm system was shut down and the guards went away, should I carry home the Cezanne, the Manet, or the Renois? In a room of Egyptian antiquities, which one caught my eye? And why? We should discuss the question with our companion.

To put it crudely, we must force ourselves to keep on paying attention. Ranking the pictures focuses our attention on our favourites. It also focuses our attention on ourselves, which is in fact our favourite topic….

…

At the end of the visit, ask which paintings stuck with you. Did you find yourself thinking back on the Munch, the Pollock, or the medieval tapestries? A week later ask the same question. Then go read about those artists or that period. That is a more useful procedure than reading about art in advance.

We should view paintings repeatedly, but especially after we have spent time with other artworks. The best way to understand one art museum is to go see another art museum with a related but not identical collection.

As someone who has always diligently tried to broaden my cultural horizons at every opportunity, it resonated with me that ironically, the best way to do so was to narrow your initial focus in a new direction and then expand from a beach head of new knowledge. It’s also liberating to see how this isn’t simply a lazy or selfish approach to high culture, but rather a utility maximising approach to cultural enlightenment.

Highly recommended for anyone wanting to enrich their cultural life.

Highlight:

“We must ignore the carping of the sophisticates. Well-educated critics may claim that pictures cannot be ranked, value is multidimensional or subjective, or that such talk, represents a totalising, colonising, possessive, post-capitalist, hegemonic Western imperialist approach. All of those missives are beside the point.

When it comes to the arts, dealing with the scarcity of our attention is more important than anything, including respecting the artists.”

My Take: Misha Glenny is probably the only journalist in the world who could have written a book of this scope about a subject matter so murky. Poly-lingual and with the street smarts that come from years spent reporting on the frontlines and the backchannels of the Balkan Wars  (brilliantly recounted in “The Fall of Yugoslavia”), Glenny has the ability to do first-hand reporting that most journalists would have neither the ability nor the courage to undertake. Glenny uses his unique skill set to follow the smuggling routes for illegal cigarettes, drugs, women and guns, to trace the paper trail of financing and money laundering needed by the illicit economy and to meet the muscle and influence needed to protect these operations. It’s a rollicking tale with some great characters.

However, it’s the bigger picture of Glenny’s story that I found both more interesting and more frustrating. On the interesting side, Glenny spends a lot of time exploring the factors influencing supply and demand for the outputs of international crime. Glenny makes a compelling case for how the high level of demand in the West for commodities like oil, cigarettes, drugs and women combined with the void of institutional authority in Eastern Europe, Africa and South America in the early 1990s to create an explosive, transnational, illicit supply response in the developing world.

As Glenny puts it:

“One group of people.. saw real opportunity in this dazzling mixture of upheaval, hope and uncertainty. These men understood instinctively that rising living standards in the West, increased trade and migration flows, and the greatly reduced ability of many governments to police their countries combined to form a goldmine. They were criminals, organised and disorganised, but they were also good capitalists and entrepreneurs, intent on obeying the laws of supply and demand.”

Through his case studies, Glenny demonstrates the globalised economy’s ability to quickly direct financial and physical resources in response to the opportunities for supra-normal profits created by illicit markets. As Glenny rightly points out, more often than not, it is government policy that creates these extraordinary returns via domestic regulation eg via prohibitions, trade embargos, cross-border barriers, extremely high rates of tax etc. Where either the substance of these regulations differs from on national market to another, incentives are created for the trans-nationalisation of crime. It’s interesting stuff that I haven’t seen too many other people writing about.

The frustrating thing about “McMafia” though is that Glenny doesn’t frame the book through this insight. Instead, he clouds his thesis with a series of interesting, but only tangentially related stories without any explanation for where it all fits together.  Glenny has aggregated so much reporting about modern trans-national crime that he can’t seem to bare to leave any of it out. The ultimate effect is to leave the reader wondering how it is all connected.

For example, Glenny dedicates a substantial portion of the book to discussing market opportunities created by the mass concession of the state’s monopoly over the use of force throughout Eastern Europe. It’s interesting stuff and Glenny goes into quite some detail on the causes and implications of the privatisation of coercive power in the wake of the collapse of Communism:

“All manner of operatives lost their jobs: secret police, counterintelligence officers, special-forces commandos and border guards, as well as homicide detectives and traffic cops. Their skills included surveillance, smuggling, killing people, establishing networks and blackmail.

The Police and even the KGB were clueless as to how one might enforce contract law. The protection rackets and Mafiosi were not so clueless – their central role in the new Russian economy was to ensure that contracts entered into were honoured. They were the new law-enforcement agencies, and the oligarchs needed their services.

By 1999, there were more than 11,500 registered ‘Private Security Firms’, employing more than 800,000 people. Of these, almost 200,000 had licences to carry arms. The Russian Interior Ministry has estimated that there were at least half as many again that remained unregistered.”

It’s interesting stuff to read about the wrestlers, boxers, weightlifters and spooks that were previously employed by various Communist regimes contracting out their services to the private sector en masse. But Glenny doesn’t contextualise the multiple chapters he dedicates to this collapse in Government within his broader message about the causes of the internationalisation of crime.

Highlight: One of the most fascinating parts of the book (and the source for its title) was how international criminal syndicates were implementing many of the business strategies of their licit counter parts, to wit the following example of branding, licensing and franchising:

“One of the most violent and feared groups to emerge in Moscow and elsewhere was the Chechen mafia. Their mere reputation for being both fearless and gruesome was often sufficient to cow an opponent or persuade a businessman to take them on as his Krysha (literally ‘roof’).

But their members were not drawn exclusively from the Caucasus, let alone from Chechnya: ‘The Chechen mafia (who should not be confused with the guerrillas fighting in the Chechen war) became a brand name, a franchise – McMafia if you life,’ explained Mark Galeotti, who has devoted the last fifteen years to studying the Russian Mob. ‘They would sell the moniker “Chechen” to protection rackets in other towns provided they paid, of course, and provided they all ways carried out their word. If a group claimed a Chechen connection, but didn’t carry out its threats to the letter, it was devaluing the brand. The original Chechens would come after them’”.

My Take: Should be required reading for all high-school students. Clearly articulated, widely accessible and practically illustrated explanations of the fundamentals of economics.

Highlight: A great chapter highlighting the benefits of sweatshops as a transitional industry in countries like South Korea and India. They might be unappealing to Western minds, but in the short-term sweatshops are often the best of a bad set of choices in developing countries and in the long run a path out of poverty for those lucky enough to work in them:

Hours are long. Wages are pitiful. But sweatshops are the symptom, not the cause, of shocking global poverty. Workers go there voluntarily, which means—hard as it is to believe—that whatever their alternatives are, they are worse. They stay there, too; turnover rates of multinational-owned factories are low, because conditions and pay, while bad, are better than those in factories run by local firms. And even a local company is likely to pay better than trying to earn money without a job: running an illegal street stall, working as a prostitute, or combing reeking landfills in cities like Manila to find recyclable goods.

… [NYC's resolution banning sweatshop-made products] can only harm sweatshop laborers: they’ll be out of a job and—literally, for those in Manila—back on the trash heap. Of course, it will be good news for textile workers in rich countries, who’ll get the business instead….

We need to understand that narrowly focused initiatives on “fair trade coffee” or “sweatshop-free clothes” will never make a substantial improvement to the lives of millions. Some, like the campaign to prevent New York City from buying uniforms from poor countries, will actively cause damage. Others, like the numerous brands of fair trade coffee, are likely to improve the income of a few coffee producers without causing a great deal of harm. But they cannot fix the basic problem: too much coffee is being produced. At the slightest hint that coffee farming will become an attractive profession, it will always be swamped with desperate people who have no alternative. The truth of the matter is that only broad-based development of poor countries will ever lift the living standards of the very poor, increase coffee prices, and improve wages and labor standards in shoe factories.

My Take: “The Tiger That Isn’t” really should be compulsory reading for anyone involved in public policy – advisers, politicians, activists and in particular, journalists. In their capacity as hosts of the BBC Radio 4 series “More or Less” Blastland and Dilnot have applied themselves to debunking statistical misrepresentations in the public debate for many years. This book is a lightweight and accessible distillation of the most common lessons of the show and includes a deceptively useful section on estimation techniques/ball park evaluations that I now use quite frequently (the value of questions as simple as “Is that a big number?” or “What exactly is being counted?” can be quite surprising).

Highlight: From a personal perspective, one of the greatest services that this book carries out is the debunking of the Average Wage myth. Anyone with a rudimentary understanding of statistics know that averages, while a useful summary statistic, can be appallingly misleading if you are trying to measure some form of central tendency in a group. All it takes is a handful of outliers to render the statistic basically useless for finding the ‘middle’ of any population.

One area in which this basic short-coming of the use of averages is routinely, flagrantly disregarded is in the analysis of national wage data. Lazy or ignorant journalists and deceptive politicians frequently cite the ‘Average wage’ or ‘Average Household Income’ as though this is a useful figure in some way. However, as Blastland and Dilnot vigorously point out, the presence of a handful of extreme outliers at the top end of the income scale inevitably skews average wage data dramatically above that of a ‘middle’ earner. As the old joke says, Bill Gates walks into a bar and everyone became a millionaire – on average. As such, as Blastland and Dilnot point out, a much better measure of central tendency for most policy discussions is the population’s median ie the middle value of an ordered set of values (or the average of the middle two in a set with an even number).

In Australia, while the average wage is frequently cited as being around $55,000 for an individual, as Andrew Leigh has pointed out, the median wage is around half this:

As you can see from Andrew’s invaluable chart, someone earning $55,000 would actually be at around the 80^th percentile of income earners ie earning more than 80% of workers. These figures come as a shock to most people when they first hear them – so ingrained is this statistical misconception in the public debate.

This misleading use of average wage data distorts public debate, by leaving punters under the impression that the ‘average Australian’ is doing substantially better than an economically ‘middle class’ Australian actually is. Similarly, it buttresses the provision of (the misleadingly named) middle class welfare by government by creating the impression that the quite well off are amongst the bulk of Australians. It really is a malignant feature of the public debate.

This misrepresentation continues to be perpetuated for a number of reasons. Some journalists are ignorant of basic statistics. Other journalists resort to using average wage data when they discover how difficult it is to locate up to date median income data. Finally, the political elite have little incentive to question the data as inflated average wage figures bring their relatively incomes closer towards the fabled ‘middle class’ to which most Australians aspire to attribute themselves. In this context, ooks like “The Tiger That Isn’t” that swim against the stream and highlight this popular misconception are performing an important service to the public debate.

My Take: Ian Ayres is a great advocate. Perhaps the reason for this is that he divides his time and expertise between the law and economics (He is both the William K. Townsend Professor at Yale Law School and a Professor at Yale’s School of Management). As a result of these divided loyalties, as a writer, Ayres retains the enthusiasm of an amateur as well as a lawyer’s focus in prosecuting a case. This mix can produce some engaging and exciting advocacy, but it can also leave him somewhat blind to the limitations and obstacles to his cause. “Super Crunchers”, is no exception. In this book Ayres makes an enthusiastic and compelling case for the potential of data driven analysis, while completely overlooking the not insubstantial obstacles to realisation of this promise.

The core premise of “Super Crunchers” is a good one. The emergence of technologies that allow the collection of extraordinarily large datasets combined with the computer processing power that allows for the easy use of regression and randomisation trials to analyse these data sets does create an enormous opportunity for data driven decision making. And as Ayres demonstrates over and again in “Super Crunchers” the decisions informed by statistical algorithms frequently outperform those made by highly educated, but more intuitive, subject area experts.

The seminal example Ayres gives of how good data and a better algorithm can best the experts in the seemingly most subjective of fields is the story of Princeton economist, Orley Ashenfelter and his Liquid Assets wine newsletter. Armed only with an algorithm informed by time-series regression analysis Ashenfelter was able to predict the quality of Bordeaux vintages using only data on the vintage’s winter rainfall, average growing season temperature and harvest rainfall. While originally the subject of scorn and derision, Ashenfelter’s predictions proved to both gazump and better those of the connoisseurs on a consistent basis. Ashenfelter’s success and the publicity his cause attracted went on to inspire other data geeks to apply their statistical toolkits to other areas, most notably Billy Beane, the general manager of the Oakland Athletics, who applied the tools to the analysis of baseball prospects. Since the release of “Super Crunchers”, statisticians have achieved public success in a range of other fields including Daryl Morey, the General Manager of the Houston Rockets (“the Dork Elvis of the NBA”) in basketball and Nate Silver in politics.

However, while there are plenty of success stories and while the potential is real, the fact is that a utopia of ubiquitous, rational, data-driven decision making is a long way from reality (For a good Australian take on this see Andrew Leigh here). As David Leonhardt pointed out in the New York Times review of the book:

“Evidence-based medical treatment, to take one of his favorite examples, is still far from the norm in this country.”

While Ayres correctly identifies the potential of “Super Crunching”, I’m afraid he vastly under-estimates the social and institutional barriers to its proliferation.

For starters, there is a thicket of government regulation around privacy and data protection that stands in the way of data collection in a number of fields not the least of which, Medicine.

But moreso, the most significant barriers to the adoption of data-driven decision making are social and institutional. The ‘experts’ that Ayres anticipates being usurped by Super Crunching will not go slowly into the night.  These people currently hold positions of significant respect, power and influence by virtue of their ‘intuitive’ expertise. As has been seen in most of the examples that Ayres cites in his book, they will use their privileged and powerful positions to protect their current status whether via formalised professional standards or informal marginalisation of data geeks. While Ayres is cheerily optimistic about the ability for the demonstrably better Super Crunchers to naturally outperform and usurp the experts, I’m not as convinced. For the moment at least, the majority of fields of expertise are not quantitatively measurable. In a lot of areas, it’s not possible to decisively determine a winner and a loser in a contest between a Super Cruncher and a traditional expert. In these situations, the status quo will be a powerful obstacle to the adoption of wide spread data driven decision making.

Highlight:

“We are in a historic moment of horse-versus-locomotive competition, where intuitive and experiential expertise is losing out time and time again to number crunching.”

My Take: Um, yeah Thomas – where have you been for the past 7 years??

A shallow  (excuse the pun)conceptual analysis stretched into a 500(!) page book. Friedman is sometimes an ok journalist and this book has some enjoyable and enlightening sections (such as the chapter on the Japanese speaking Chinese province of Dalian and the Japanese outsourcing economy that has sprung up there) but when he flicks the switch to theorist/philosopher/grand theorist he’s very very ordinary.

His conclusions are patently obvious and not in the good “Why hasn’t any one thought of that before” way but more in the “It took you 500 pages to say something a half decent journalist could say in a column?!” way. To make matters worse, the way he carries on about his grand idea as being some kind of revelation is really irritating. That being said, I picked this book up in the remainders bin of an English language bookshop in Chengdu for around A$1 so I can’t really complain.

Highlight:

“While the dynamic force of Globalisation 1.0 was countries globalising and the dynamic force in Globalisation 2.0 was companies globalising, the dynamic force in Globalisation 3.0 – the force that gives it its unique character – is the newfound power for individuals to collaborate and compete globally.”

Yep – I think this is a good, brief explanation. If only the rest of the book was as concise and lucid.

My Take: I love the concept of this book – the first in a series on “Books That Changed the World” read and paraphrased by prominent authors “so you don’t have to.” Just the kind of lightweight self-improvement that appeals to me. An enjoyable way to get a slightly more in depth look at Smith’s work than you do from assigned readings of condensed extracts.

Given that Wealth runs to over 900 pages, it’s a tome that is uniquely suited to this format – one of those books that O’Rourke notes are more ‘read in’ than ‘read through’ . In fact, this book is s double value as O’Rourke also goes through Smith’s ‘Theory of Moral Sentiments’, a book so long and turgid that nobody other than Nick Gruen ever reads it.

However, while the concept is great, this is not O’Rourke’s strongest work. It doesn’t have the zest of Republican Party Reptile or the zing of Parliament of Whores. Ultimately, however, O’Rourke is not the star of this book – his wit and barbs fade in comparison to Smith’s brilliant thinking. As a result, while this isn’t as amusing as your average O’Rourke book, it’s still an engaging read.

The Smith that O’Rourke draws out is far from the caricature of lazziefaire economics that many make him out to be. At the most basic level, Smith’s basic insight was two-fold:

1. productivity is increased through self-interest, the division of labour (specialisation) and trade. Where government intervention is needed to safeguard this, it ought to act.
2. However, the economy is so complex that government intervention is extremely difficult without unintended (and often counter productive) consequences.

Smith wasn’t saying that government should pack up and go home, he was saying it should know its (very basic) limits. It’s a prescription for common sense humility in governance not the end of governance itself.

Echoing this theme of intellectual modesty, O’Rourke highlights a paragraph from Smith that would warm the heart of  a certain comrade friend of mine who once professed his ideology to be ‘pragmatism’:

“From a certain spirit of system… we sometimes seem to value the means more than the end, and to be eager to promote the happiness of our fellow-creatures, rather than from a view to perfect and improve a certain beautiful and orderly system, than from any immediate sense or feeling of what they either suffer or enjoy.”

Further, according to Smith, theorisers become:

“Intoxicated with the imaginary beauty of this ideal system.. (until).. that public spirit which is founded upon the love of humanity…(is corrupted by a spirit of a system that).. inflames it even to the madness of fanaticism”

When you consider that this was written long before the emergence of communism, or even democractic capitalism as an ideological system, Smith’s prescience is impressive.

However, this is really the ultimate shortcoming this book. While Smith’s insights are consistently impressive, they aren’t matched by O’Rourke’s writing.  Given the quality of some of O’Rourke’s previous work, I was left wanting more.

Highlights:

On why ‘The Wealth of Nations’ is so long:

“When Adam Smith was being incomprehensible, he didn’t have the luxury of brief, snappy technical terms as a shorthand for incoherence.”